Question
please help with showing how the graph would change and explain your answers for the change in graph, the fill in the blank and the multiple choice question.
WarehouseCorp is a large corporation that makes just about everything. It has 300 million shares of stock outstanding. The following graph shows the market for WarehouseCorp stock at the initial equilibrium price of $90 per share. WarehouseCorp's market capitalization is million One day, WarehouseCorp announces it has been granted a patent on a new drug that can cure "bad personality disorder," a condition that affects millions. The patent is a surprise to everyone outside the corporation. Show the effect of this on the market for WarehouseCorp shares by dragging either the supply curve for shares, the demand curve for shares, or both. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move the curve and it snaps back to its original position, just try again and drag it a little farther. PRICE Dollars per sharel 180 Suppty 150 120 90± 60 30 Demand 100 200 300 400500600 QUANTITY Milions af shares)
Explanation / Answer
1. Market Capitalisation is given as = Value of share * Volume of share = 90 * 300 million = 27000 million = 27 billion.
2. Due to the announcement the demand curve will shift to the right.
3. option D is more intuitive.
